Trump Faces Tough Choice as US Weighs Sanctions on China Over Iran Oil

When Treasury Secretary Scott Bessent unveiled nearly 60 sanctions targets in his “Economic D-Day” rollout, the most notable names weren’t on the list at all: Chinese financial institutions, the single biggest node in Iran’s oil trade, went untouched — a deliberate omission that tells a more revealing story than anything Washington actually announced.

That gap is what a former US national security official meant in describing Washington’s approach to Al Jazeera as one of hoping it never has to pull the secondary-sanctions trigger on China at all. The Trump administration and Treasury appear to be holding the option in reserve rather than deploying it, largely because the American and Chinese economies are, as the analysis puts it, too deeply intertwined for broad economic action against Beijing to be diplomatically simple. Washington’s current strategy instead looks aimed at nudging China toward alternative crude sources rather than directly punishing it for buying discounted, sanctioned Iranian oil — discounts Chinese refineries have used to gain a real cost advantage over global competitors.

The scale of what’s actually at stake explains the caution. China bought roughly 80% of Iran’s shipped oil in 2025, according to analytics firm Kpler, and two-way China-Iran trade reported at $9.96 billion doesn’t even include the separate $31.2 billion in Iranian oil shipments tracked by the US-China Economic and Security Review Commission. Georgetown’s Paul Musgrave told Al Jazeera that pulling off effective pressure against China “is going to be very difficult,” while Chatham House’s Yu Jie was more direct: targeting Iran’s economic allies “won’t alter China’s involvement and the existing trading relationship with Iran,” partly because Trump is simultaneously trying to stabilize the broader US-China relationship even as Beijing seeks its own “temporary truce” with Washington.

The timing gives that truce logic particular weight. Trita Parsi of the Quincy Institute noted that going after Chinese entities “only weeks before Xi is supposed to arrive in Washington” — a visit expected around September 24 — looks unlikely precisely because of how much diplomatic capital it would burn right before that meeting. Parsi also credited China with helping stabilize oil markets during the war’s worst period by halting purchases as prices spiked, cratering demand and keeping crude under $100 a barrel for extended stretches — a contribution that complicates any simple narrative of China as purely an obstacle to US pressure.

Bessent’s own framing at the sanctions announcement all but confirmed the calculation. Asked why financial institutions weren’t targeted outright, he said Washington would instead give countries and companies time to cut ties, adding: “Why would I want to blow up the global financial system?” Defense Priorities’ Jennifer Kavanagh went further, telling Al Jazeera that cutting off Chinese economic ties would be essential to any real pressure campaign against Iran — “however, the United States won’t do it,” because China would retaliate and has genuine leverage, including its position as a major supplier of critical minerals US manufacturers depend on.

China’s public position has stayed consistent throughout: Foreign Ministry spokesperson Lin Jian said Beijing would “safeguard its own interests,” called for an immediate end to unilateral measures, and insisted Chinese-Iranian cooperation operates within international law. Whether that stance survives contact with Bessent’s promised secondary sanctions — or whether, as most analysts interviewed expect, China ends up being the one country the “greatest economic isolation in history” quietly excludes — will likely become clearer only after Xi’s Washington visit concludes next month.